US Stocks Drop Modestly; DJIA Down 17, Pfizer Drags

KristinaPeterson

NEW YORK (MarketWatch) -- U.S. stocks fell lower Thursday on the last day of trading, as investors retreated, waiting to close out a year on track to be the stock market's best since 2003.

The Dow Jones Industrial Average dropped 17 points, or 0.2%, to 10531, in early trading. Pfizer weighed on the measure, with the pharmaceutical maker down 0.6%. Walt Disney was the Dow's best performer, up 0.9%.

The tech-heavy Nasdaq Composite edged down less than 1%. The Standard & Poor's 500 fell 0.1% recently, weighed by its telecom and health sectors.

Earlier Thursday, U.S. stock futures pared slight gains after the Labor Department reported that weekly jobless claims fell to their lowest level in 18 months, confirming investors' general expectations that the labor market is improving.

The number of people filing new claims for unemployment benefits in the U.S. fell by 22,000 to a seasonally adjusted 432,000 in the week ended Dec. 26, the lowest level since July 19, 2008. Economists surveyed by Dow Jones Newswires had forecast claims would rise by 3,000.

Alan Lancz, president of Alan B. Lancz & Associates, said many market watchers already assumed the employment situation was on the mend.

"A lot of that is already in the market," Lancz said. Investors tracking a "V" shaped recovery think the market is halfway up its ascent, he noted. "These economic numbers have to continue to be better than consensus for the market to continue to fuel further gains."

In other markets, the dollar rose against the yen, but fell against the euro. The U.S. Dollar Index, which represents the greenback against a basket of other six currencies, was down 0.3%.

Oil futures and gold futures rose, while Treasurys sank. The 10-year note was recently off 23/32, to yield 3.882%.

The moves followed Wednesday's small gains for U.S. stocks, boosted by reports showing a pickup in business and manufacturing activity in the Midwest. Year-to-date, the Dow Jones Industrial Average has gained 1772.12 points, or 20.2%, the biggest yearly point and percentage gains since 2003.

Among stocks in focus, American Tower rose 0.3%, in early trading after the operator of wireless communications sites began talks to acquire a controlling stake in India's Essar Telecom Infrastructure, in a deal valued at around 20 billion rupees ($429.1 million).

Trading volume is expected to remain light throughout the day. Markets will be closed Friday for the New Year's Day holiday.

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